Category / IRS

by Hoosier Econ

Michael Jackson Still Owes Taxes

jackson

The King of Pop may be gone but his estate is still being hounded by the IRS. According to Forbes, they are going for more blood:

In a previously unreported court filing, the government says that IRS auditors originally thought the King of Pop owned only 50% of certain master recordings at his death in June 2009, when he really owned 100% of them. That 100% interest was worth $91 million by the IRS’ figuring, compared to the $11 million reported on the Jackson estate tax return.

The change brings the IRS’ valuation of Jackson’s estate and lifetime taxable gifts up to $1.178 billion, compared to the $7 million the estate reported. The IRS now wants a total of $525.6 million in tax and $205.1 million in gross valuation misstatement and negligence penalties. (Any interest owed will be on top of that.) Of course both the IRS and the estate’s values are best regarded as opening bids in what could be a long negotiation. A trial, if there is one, is far off.

by Hoosier Econ

Majority of $159 Billion of Owed IRS Taxes Will Go Unpaid

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JustFactsDaily.com released some new IRS data showing in 2013 there was $159 Billion in unpaid federal taxes. Here is what they found:

Per the IRS’s Fiscal Year 2013 Financial Statement, 78% of unpaid taxes that taxpayers have agreed they owe or courts have ruled they owe are “estimated to be uncollectible due primarily because of the economic situations of the taxpayers.”

by Hoosier Econ

2015 Fiscal Year For U.S. Government Starts Today

The United States federal government starts a new fiscal year today. The President proposed a budget in March but has not worked with the Senate or House in finalizing an actual budget. U.S. federal government spending will occur through later appropriations legislation that is signed into law.

Here’s a snapshot of 2015 proposed spending and tax revenues from the President. Deficits and debt still accumulate at an historical rate.
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by Hoosier Econ

IRS Now Taxing Business Meals

The government is broke and with that the IRS will go searching for any revenue possible. Unfortunately it will probably cost more then what it actually brings in. This will stretch out to many industries and not just tech firms listed in the article. The first people to lose any benefits should be the politicians and government employees who are allowed up to $20/day bought for them.

Here is the tax news out of Silicon Valley Business Journal:

The Internal Revenue Service wants to tax the free food that tech companies like Facebook and Google give to employees, potentially putting one of Silicon Valley’s most famous perks in jeopardy.

The IRS argues that the employer-provided food is a taxable fringe benefit and has sought back taxes that may amount to a third of the meals’ fair-market value

In another move that shows more focus on complimentary fare, the IRS and U.S. Treasury Department said their top tax priorities list for the current tax year that ends next June will include taxing “employer-provided meals,” the Journal reported. The agencies plan to issue new instructions on the matter as well, though specifics and details were not provided.

by Hoosier Econ

H&R Block: Yeah Taxes Will Get More Complicated Because of Obamacare

H&R Block confirmed what many predicted would happen with the new health care law enacted 4 years ago: make taxes even more complicated.

Speaking on H&R Block’s quarterly earnings conference call, CEO William Cobb said that the company was already taking steps to train its tax preparers based on the draft forms that the Internal Revenue Service has released to comply with Obamacare.

“As expected, the forms are very detailed and can present significant complexity, depending on a filer’s coverage status during the year, income level, and household composition,” Cobb said. “Depending on their situation, there are instances where filers may need to file multiple new tax forms and complete additional worksheets.”

And he wasn’t he wasn’t finished…

“Depending on the type of exemption, the process to claim it could be quite cumbersome and time consuming,” Cobb said.

by Hoosier Econ

Colorado Pot Tax Revenue Prediction Goes Up In Smoke

Colorado government tax revenue prediction was off for the first six months of legalized pot sales. They were only off by about 70%.

Via CBS4 Denver –

When voters approved recreational marijuana sales the state predicted it would pull in more than $33 million in new taxes in the first six months. The actual revenue came up more than $21 million short.

by Hoosier Econ

Swiss Banks to IRS: Pound Sand

This story is from Reuters:

At least 10 Swiss banks have withdrawn from a U.S. program aimed at settling a tax dispute between them and the United States, Swiss newspaper NZZ am Sonntag said on Sunday, quoting unnamed sources. Around 100 Swiss banks came forward at the end of last year to work with U.S. authorities in a program brokered by the Swiss government to help the banks make amends for aiding tax evasion.

The newspaper said the banks were convinced they had not systematically broken U.S. law and lawyers of the U.S. Department of Justice had actually been surprised to see them take part in the program and did not object to the banks leaving the program.

by Hoosier Econ

IRS Desperation: Taxing Frequent Flyer Miles

Two things about the U.S. government, they are broke and their tax collection agency the IRS will do anything for revenue. This piece of legal news comes via TaxProf Blog:

The Tax Court yesterday required the taxpayer to include $668 in income as reported by Citibank on Form 1099-MISC as the value of an airline ticket received by the taxpayer upon redemption of 50,000 “Thank You Points” from opening a Citibank account. Shankar v. Commissioner, 143 T.C. No. 5 (Aug. 26, 2014).

by Hoosier Econ

Indiana 2012 IRS Data by Zip Code/County

IRS released data tax filings for 2012 from across the United States and showed the breakdown by both zipcode and county for states. The IRS does produce good data reports throughout the years that shows how people move and in out of income brackets. In reality, this usually debunks a lot of political talking points like “the poor” and “income inequality”. Many data numbers the IRS have garnished from people filing taxes is the movement of incomes and tax brackets that are achieved.

I looked at the tax filings by zip code only so far. Found some interesting stats for the state of Indiana. Here is what I found for the year 2012:

– 2,992,840 returns filed

– The top 3 returns filed by zip code were 1) 46143(Greenwood) 24,340   2) 46227(Marion County/Perry Township) 26,280   3)46307(Crown Point) 30,070

– State wide returns filed by salary:

58k returns were $200k or more

261k returns were $100-$200K

240k returns were $75-$100K

373k returns were $50-$75k

1.59 million returns were $50k or less

– 49,000 farms were filed on tax returns

– Just over 1 Million of the returns showed payments from either Social Security benefits or Annuities/Pensions.

 

Like I said, many more numbers were in the data and the county breakdown I didn’t even research…..yet. But enjoy the digging in.

by Hoosier Econ

U.S. House Votes to Cut IRS Budget

While I personally would like to see Lois Lerner criminally arrested for lying to Congress and pulling her “my e-mails” disappeared, I will take this small victory being reported by the AP:

The GOP-controlled House has voted to slash the budget for the Internal Revenue Service’s tax enforcement division by $1.2 billion, a 25 percent cut that would mean fewer audits of taxpayers and make it more likely that people who cheat on their taxes will get away with it. The House approved the cuts by voice vote after little debate Monday night as it took up a $21 billion spending bill that sets the IRS budget.

The IRS doesn’t need reform, it needs to be gutted. The pipe dreams of little fixes hear and there is over. Replace the IRS with a new tax code like the Fairtax.

Unfortunately the Senate led by Harry Reid will not act on this and just table it. More bad news, in a few years the IRS will be full tilt Obamacare enforcement so I would expect more scandals of bigger proportion then Lois Lerner.